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Binary Options Strategy
Welcome to our binary options strategy section. Here you will find a beginners guide to strategies, leading on to more advanced information about things like money management, and articles on specific strategies.
Basic Strategy For Successful Trading
Strategy is one of the most important factors in successful binary options trading. It is the framework from which you base your trade decisions, including your money management rules, and how you go about making money from the market. There is no one Holy Grail unfortunately, if there were then we’d all be using it!
The two most very basic categories of strategy are:
Fundamental strategies focus on the underlying health of companies, indices, markets and economies and while important to understand, is not as important to binary options as the technical aspect of trading.
Technical trading, or technical analysis, is the measurement of charts and price action, looking for patterns and making educated guesses, speculations, from those measurements and patterns.
Strategy simplifies your trading, takes guesswork out of choosing entry and reduces overall risk.
The text book definition reads like this; a plan of action designed to achieve a goal or overall aim, the art of planning and directing operations in order to achieve victory. When it comes to trading the goal is to 1) make money and 2) not lose money.
The number one method of achieving this goal is to use a rules based approach to choosing entries that relies on ages old, tried and true technical analysis indicators. There are dozens, possibly hundreds if not thousands, of ways to trade the market, all strategies. They can be categorized in terms of the tools used, the time frames intended, the amount of risk associated with and many other ways, these being the primary.
- Price Action/Scalping Strategies – Price action strategies rely on the movement of the market to time entry. These can be trend following or not, long or short term and utilize bullish or bearish positions.
- Trend Following/Directional Strategies – Trend following strategies target assets that are trending strongly to pinpoint a series of profitable entries with a high rate of success.
- Range Bound/Short Term Strategies – 99% of the time the market, or an individual asset, is not trending but trading in a range within a high and low mark. These strategies focus on support and resistance levels, reversals within the range and short term trends as asset prices move up or down from support to resistance and vice versa.
- Long Term/Momentum Strategies – These are the less risky of the strategies as they target stronger signals and longer term time frames. These signals have a higher chance of success but take longer to develop and longer to unfold than other types of signals.
A technical analysis indicator is, most often, a mathematical formula which converts price action into an easy to read visual format. Common types of indicators include but are not limited to moving averages, trend lines, support and resistance, oscillators and Japanese Candlesticks.
Money Management
Strategy is 1 of the 2 pillars of risk management, the other is money management. You control risk by targeting only good signals, weeding out obviously bad signals, and never putting so much money on one trade that it will wipe out your account.
Money management is the control of your overall trading fund. It should clarify trade size, and long term financial management – leaving you to focus only on trading. A well thought out money management structure should simplify:
- Trade size
- Risk management
- Future growth
- Stress
A trader with a clear financial plan should not need to be concerned with whether they can trade tomorrow, or if their trade size is correct or how they might grow investments in line with their progress. All those decisions are controlled by managing their overall capital with a clear plan.
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Japanese Candlesticks
This is the most common method of viewing price charts. The candlesticks give an easy to read view of prices, open high low and close, that jumps off the charts in way that no other charting style can do. They are the basis of most price action strategies and can be used to give signals as well as to confirm other indicators.
Support And Resistance
These are areas of price action on the asset chart that are likely to stop prices when they are reached. Support is found when prices stop falling, this happens when buyers step into the market and are said to be “supporting prices”. Resistance is found when prices stop rising, this happens when sellers enter the market (or buyers disappear) and are said to be “resisting higher prices”. These areas, often represented by horizontal lines, are good targets for entries and possible areas where price action may reverse.
Trend Lines
These lines connect highs and lows formed by asset price as it moves up down and sideways. A series of higher lows and higher highs is considered to be an uptrend and a sign that prices are likely to move higher, a series of lower highs and lower lows is considered to be a downtrend and a sign that prices are likely to move lower. The trend line can be used as a target for support and resistance, as well as a an entry point for trend following strategies.
Moving Averages
Moving averages take an average of an assets prices over X number of days and then plots those values as a line on the price chart. Moving averages come in many forms and are often used to determine trend, provide targets for support and resistance and to indicate entries. There are dozens of methods of deriving moving averages, the most common include Simple Moving Averages, Exponential Moving Averages, volume weighted moving averages and many more. They can be used in any time frame, and set to any time frame, for multiple time frame analysis and to give crossover signals.
Oscillators
Oscillators may be the single largest division of indicators used for technical analysis. They include tools like MACD, stochastic, RSI and many, many others. These tools, in general, use price action and moving averages in a combination of ways to determine market health. They are displayed as a stand alone tool, usually as a line that ranges between two extremes or above and below a mid point, that can help determine trend, direction, support/resistance, market strength, momentum and entry signals.
Trading Psychology
With any form of trading, psychology can play a big part. A lack of confidence can mean missed trades, or investing too little capital in winnings trades. At the other end of the spectrum, over-confidence can lead to over trading, or increased risk – either of which could wipe an account very quickly.
So the trading psychology of the trader is very important. It can also be actively controlled or managed (at the very least, acknowledged). It is another often overlooked area of trading skill, but one well worth spending time to consider.
Read more on trading psychology and learning from experience.
A Basic Binary Options Strategy
Here is an example of some basic rules for a binary options strategy.
- The trend is your friend, only take trend following entries.
- In an uptrend only enter when prices are near support, in a downtrend only enter when prices are near resistance.
- When prices are near support/resistance wait for a confirming candlestick signal.
- When the candlestick signal appears wait for stochastic and/or MACD to confirm, a bullish crossover in an uptrend or a bearish crossover in a downtrend.
- When rules 1 through 4 are met, enter the trade, only use 3% of account on each trade.
- When choosing expiry use 2XCandle length. IE, if you are using 1 minute candles then 2 minute expiry, if 1 hour candles then 2 hour expiry.
- If the trade fails examine why it did not work, make adjustment if necessary and move on to the next trade. If the trade works move on to the next trade.
Top Brokers
No strategy is going to be profitable if you trade with an unreliable broker. These are our top recommended trading platforms for trying out your strategy.
Most Popular Strategy Articles
Strategies for Different Markets
Choosing a Trading Strategy
Developing a trading strategy for the binary options market requires a key understanding of how the market operates in terms of the trade contracts available, the various expiry times, and the understanding of the behaviour of the individual assets.
Unlike the forex market where the asset has to move in one direction or the other by an appreciable number of pips to the trader’s favour before profits are made, the binary options market is peculiar. Apart from the Up/Down trade which is based on direction and mimics the requirements of the trades in other markets (except the pip movements), other trade types in the binary option market operate in totally different ways. There are different trade contracts for different platforms. Some binary options contracts do not even require the trader to get the direction of the asset correct. For instance, trading the OUT contract will need the asset to hit one price boundary or the other for profit to be made. So it takes the trader being able to identify a suitable trade contract to be able to fashion a suitable strategy. What is used to trade the Up/Down contract is not the same as will be used for the In/Out contract. The contract type will determine the strategy.
For instance, trading the Up/Down contract will require a strategy that can determine if the asset will make a bullish or bearish movement. Trading the In/Out contract will require either a range trading strategy or a breakout trading strategy to identify a time when the asset stays in a range or breaks out of that range. If you are looking to develop a trading strategy for the In/Out trade, this is how your mind should be working.
In developing a strategy based on the binary options trade types to be traded, there are tools that can assist the trader. This is where chart patterns, signals services, candlesticks and technical indicators will come in. A simple tool like the pivot point calculator can be used as part of a TOUCH trade strategy with very effective results. Using tools like these will take us to the next part of choosing a strategy, which is how to understand and set expiry times.
Understanding Expiry Times
Expiry times are very important to binary options, because all trades in this market have time limits. However, not all binary options trades require time limits to be successful. Trades such as the Up/Down trades must reach expiry before the trade outcome is known. In contrast, trades such as the OUT component of the boundary trade or the TOUCH component of the High Yield Touch or Touch/No Touch trade contract must not necessarily reach maturity before the outcome of the trade is known. If a trader bets on a TOUCH outcome and the asset touches the strike price well before expiry, the trade outcome is already known and the trade is terminated as a profitable one.
So if the trader is not very good at setting expiry times/dates (and really, no trader in the market can boast of getting his expiry settings right all the time here), the binary options trading strategy will have to be tailored towards trade contracts which are not totally expiry-dependent.
Now when you identify and separate trades that are not so dependent on expiries from those that are, you can better understand what kind of strategy you would be looking at.
Understanding Asset Behaviour
The binary options market combines assets from different asset classes into one market. These assets do not behave alike. Some assets are very volatile with large intraday movements. A very clear example is gold. Some binary options assets are not traded round the clock but only at specific times e.g. the stock indices. The factors that may trigger a massive move in a stock index would obviously not be the same for a commodity or a currency. Even within the same asset class, no two instruments are exactly the same or behave alike.
An understanding of asset behaviour is therefore key to being able to develop a trading strategy for the market. It is up to the trader to study the behaviour of assets, understand the technical and fundamental indicators that will influence the behaviour and price movement of that asset, and then create a trading strategy that will work for that asset.
Demonstration
In this section, we will demonstrate the application of all the parameters we have mentioned above using a simple but effective trade strategy.
– The strategy we will use determines price bullishness/bearishness, so we will trade a Call/Put contract.
– We will trade the strategy on a one hour chart, so it will be have an expiry of one hour. We do this using our understanding that the effect we want to trade on the hourly chart, will happen in an hour.
– We want to use this on an asset that is liquid and responds to the strategy. So we will use the EURUSD.
The strategy has been used to create a colour-coded indicator, which shows a green arrow on bullish signals and a red arrow for bearish signals. It aims to trade the EURUSD because this currency responds very well to price stimuli during the London/New York overlap in the forex time zone, and the response can be delivered in an hour.
As soon as the red arrow appeared (as shown above), the signal was to trade a PUT option on the Call/Put digital option. Using this signal, the trade was executed on the binary options platform. The price of the asset (EURUSD) fell in one hour from the time the signal was generated to the expiry, producing a trade result in our favour.
This strategy (a custom strategy) fulfilled all our conditions:
a) It was suited to a trade contract on the binary options market.
b) It was a strategy that was suited to help the trader use a suitable expiry.
c) It was suited to the behaviour of the asset and above all, THE STRATEGY WAS A PROFITABLE ONE.
7 Binary Options
Binary Options Trading Requires Very Little Experience
The common misconception is that binary options trading and forex trading can only be done by one that has a certain amount of experience in the area. There is no requirement to have any previous experience in financial trading and with a little time, any skill level can grasp the concept of binary options trading.
The basic requirement is to predict the direction in which the price of an asset will take. The price will either increase (call) or fall (put). Successful binary options traders often gain great success utilizing simple methods and strategies as well as using reliable brokers such as IQ Option or 24Option.
From this page you will find all the relevant strategies for binary options trading.
Get started with 3 easy steps:
Choose a broker from the list below
Min. Invest | Min. Deposit | Max. Returns | |||||||||||||||||||||
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Max Payout | Min Deposit | Min Investment | Score | |
100%* | $ 10 | $ 1 | 98/100 | IQOption.com Review |
95% | $ 10 | $ 1 | 97/100 | ExpertOption.com Review |
92% | $ 10 | $ 1 | 96/100 | OlympTrade Review |
91% | $ 5 | $ 5 | 96/100 | Binary.com Review |
* in case of correct prediction.
A Genuine Trading Revolution – Binary Options
Looking for a way to earn some extra cash? Or maybe even start a new career? Binary options trading will allow you to do that and much more. All you need to do is open your free trading account with one of the brokers. This exciting new kind of online trading has only recently started to develop, but already countless people are using it as a significant source of income. The concept is extremely simple – you pick an asset and predict whether its price will rise or fall. If you are successful, you simply collect your profit.
Of course, this does not just boil down to dumb luck. People familiar with market trends can make accurate predictions and earn a lot of money by doing so since there are many different strategies and methods which can help traders make their investment decisions. However, one does not have to be a financial expert to do this. Beginners can also participate and earn some significant funds in the process because all serious brokers offer various education centers. They are sometimes called trading academies and contain clever tips, helpful videos and detailed explanations. You may also find some interesting webinars or online courses there. They will allow you to discuss binary options trading with other people, learn from each other and clear up any misconceptions you might have.
Finding the right broker
But how do you find a good broker? Well, that’s where BinaryOptionsTrading-Review.com comes in. We assess and evaluate binary options brokers, so that traders know exactly what to expect when signing up with them. Our financial experts have more than 20 years of experience in the financial business and have reviewed dozens of brokers.
Being former traders ourselves, we know precisely what you need. That’s why we’ll do our best to provide our readers with the most accurate information. We are one of the leading websites in this area of expertise, with very detailed and thorough analyses of every broker we encounter. You will notice that each aspect of any broker’s offer has a separate article about it, which just goes to show you how seriously we approach each company. This website is your best source of information about binary options brokers and one of your best tools in determining which one of them you want as your link to the binary options market.
Why Binary Options Trading Review?
So, why is all this relevant? As you may already know, it is difficult to fully control things that take place online. There are people who only pose as binary options brokers in order to scam you and disappear with your money. True, most of the brokers we encounter turn out to be legit, but why take unnecessary risks? Just let us do our job and then check out the results before making any major decisions. All our investigations regarding brokers’ reliability can be seen if you click on our Scam Tab, so give it a go and see how we operate. More detailed scam reports than these are simply impossible to find.
However, the most important part of this website can be found if you go to our Brokers Tab. There you can find extensive analyses of numerous binary options brokers. Each company is represented with an all-encompassing review and several other articles dealing with various aspects of their offer. A list containing the very best choices will appear on your screen as you enter our website whose intuitive design will allow you to access all the most important information instantly. We will explain minimum deposits, money withdrawals, bonuses, trading platforms and many more topics down to the smallest detail. Rest assured, this amount of high-quality content dedicated exclusively to trading cannot be found anywhere else. Therefore, visiting us before making any important decisions regarding this type of trading is the best thing to do.
Would you like to trade forex?
However, that’s not everything we offer you. Online trading is more than just binary options, much more, especially if you have a thing for currencies. There is a whole industry dedicated solely to buying, selling and exchanging them directly. The foreign exchange market (also known as forex) turns over trillions of dollars every day, and you can join in on the action with just a few clicks. You will find many brokers in this industry too, with many big and powerful companies serving literally millions of traders every day. Choosing the right one may therefore be a challenge, but don’t worry – we will be with you every step of the way.
All you have to do is head to the BinaryOptionsTrading-Review.com forex tab where you will find a selection of the very best brokers this industry has to offer. In our extremely detailed reviews, we will show you absolutely everything you need to know about them. With our help, you will save hours in researching a company. We make things simple, clear and easy to understand. Once you finish a text, you will have all the information you need to make an informed decision on where you want to trade. And if you don’t like what you read, don’t worry: we have analysed dozens of top-tier brokers and are still producing high-quality articles on regular basis. Therefore, if you’re looking for an online trading partner, you will find the perfect one here. And yet, there is more.
The world of cryptocurrencies
Another big trading industry we cover here deals with the so-called cryptocurrencies. This latest trading trend is taking the world by storm, coins and tokens are going through the roof and it sure looks like we’re about to see another big trading revolution. More and more merchants are offering the possibility to pay for their products and services this way, too. The main advantages of this type of transactions are its speed and simplicity. The world of finance is changing dramatically, so if you want to be a part of that process and explore the countless new opportunities that will arise from that, BinaryOptionsTrading-Review.com is once again the best place to get informed.
In our crypto tab, not only will you find analyses of various exchanges and all details of their offer, but you will also be able to learn everything you want to know about this type of trading. How to acquire cryptocurrencies? Which technology powers them? What do they bring to the table? Our trading experts, who are always on top of this industry’s latest developments, will show you all that and much more. With us by your side, you know exactly what to trade, when to trade it and why. Therefore, the chances for your success will grow. Of course, we will also lay out in front of you the information you need to know about the most interesting exchanges out there, all with the same attention to details we show with the other two trading industries.
Additional features
Comments and reviews are by no means the only things BinaryOptionsTrading-Review has to offer. Our readers can also find some very helpful and completely Free Daily Signals. This feature is our gift to our readers. Consider it a token of appreciation for all the great feedback we get every single day from you. We hope that we can help even more prospective traders in the near future. Just enter your name, surname and e-mail address in a small form in the top right corner of your screen and you will be ready to receive these helpful tips. They are basically investment advice from our esteemed financial experts which often yield significant profits. This is because we only share with our readers those signals we believe to have the highest probability of success.
Apart from binary options trading signals, BinaryOptionsTrading-Review.com will also supply you with the latest news from the financial world. This way, you will always be aware of the most important events in the world of economy.
We cover the globe
We also pay close attention to non-European markets, especially those belonging to the United States and Asia. Therefore, if you happen to come from one of those regions we can still be very much helpful to you. Keep in mind that these markets may have different rules from the ones the EU enforces. That’s why some of the brokers aren’t available to traders from different continents. This makes the information we provide that much more valuable. You can learn all about these differences through our articles and here, once again, we have to emphasize our website’s great design. We have a huge amount of data for you, and you will be able to browse it effortlessly.
Occasionally, we will also provide you with links to other helpful websites containing definitions and explanations of various financial terms and expressions. Hopefully, this will help you learn everything you need to know about binary options trading much faster if you are still a beginner, but it can also provide some good suggestions where to look for new trading strategies if you are a more experienced trader. In any case, our goal is to provide you with the best imaginable support. The result of that will be you extracting as much profit as you can from your trades.
How to succeed with the help of Binary Options Trading Review.com?
To be successful in this line of work, patience and research are of vital importance. Here at BinaryOptionsTrading-Review.com, our goal is to help you save valuable time when searching for information about a particular broker. We take all the risks this kind of trading entails, so you don’t have to. With the right approach, binary options trading can become a significant source of income for anyone. It offers high returns on your investments and very attractive bonuses which are often a part of a broker’s website.
Furthermore, trades expiring after only sixty seconds or less are often also a part of a broker’s offer. This means that a smart trader can make a lot of profit in a very short period of time. What makes binary options trading so popular, however, is the fact that you know all parameters ahead of time. You know how much you need to invest, how much you can earn and the exact time of expiration. This significantly reduces stress and simplifies your planning since you know all possible outcomes of the trade.
Binary Options Trading Review – your best trading partner
To summarize, we can ease all dilemmas you may have by pointing you in the right direction at the start of your trading career. With countless articles behind them, our experts know exactly what makes a good broker and how to profit with them. These people from all around the world, from New York to Tokyo, have come together to share their enthusiasm for binary options trading which they believe to be the best opportunity for profit in a very long time.
With this kind of expertise, level of dedication and amount of work invested, there is absolutely no chance that you can find anyone who comes even close to our level of service. We are a world leader in this line of work for a very good reason, so if you want to quickly increase your budget or maybe even start a lucrative trading career, you know where to look.
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Binarium
Top Binary Options Broker 2020!
Best Choice For Beginners!
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